KOSPI back above 2,000 after 5 months

The Korea Composite Stock Price Index recovered to the 2,000 mark for the first time in five months on expectations of growing tech business and stronger quantitative easing in the eurozone and the U.S.

The benchmark KOSPI closed at 2,001.38, up 4.57, or 0.23 percent, on Tuesday.
The tech-heavy Korean Securities Dealers Automated Quotations index, or KOSDAQ, also finished higher at 625.64, up 3.83, or 0.62 percent.

The KOSPI started at 2,000.26, thanks to the overnight Wall Street gains of the KOSPI heavyweights such as Samsung Electronics and Hyundai Motor. Samsung Electronics’ market value rose 5 percent, or 10 trillion won overnight, after it unveiled the Galaxy S6, the newest model of its flagship Galaxy S lineup, on Monday. 

Despite the brief plunge due to strong selling by institutional investors, the KOSPI rebounded to the 2,000 range due to strong foreign buying.

The KOSPI had been trapped below the 2,000 threshold for the past five months since the benchmark index slid to 1991.54 on Oct. 1.

Since the turn of the year, the KOSPI has fallen below 1,900 twice, in January and February. Since the beginning of the Lunar New Year holiday, the index has stayed within the 1,900 range.

On the wider scope, analysts pointed out that the subsiding Greek crisis and improving European economies are likely to have boosted investor sentiments.

With China lowering its key rate in late February, the eurozone too is heading toward stronger quantitative easing. Analysts also expect the U.S. Federal Reserve to freeze its key rate in fear of secular stagnation.

By Chung Joo-won (joowonc@heraldcorp.com)